The Essence of Momentum Analysis Michael Oliver

The Essence of Momentum Analysis Michael Oliver

Michael Oliver draws on four decades of trend analysis to outline a series of price targets and predictions for every asset class under the sun. Highlighting the ability of momentum based studies to provide early indications of market turning points, which aren’t obvious on price charts, Michael’s forecasts include a bear market for the dollar, potentially shifting all four tectonic plates in financial markets.

This is brilliant! More of Mr. Oliver, please.
BTW his way of looking at momentum is not a black box, as was commented early on. The indicator is just different from the usual momentum oscillator everyone else is looking at.

BRILLIANT! I love how John Michael Oliver thinks. He is among the very best in understanding and explaining the long-term, global macro to short-term spectral linkages. Daniel Want of Prerequisite Capital Management was spot-on in referring us back to this presentation. I will be re-viewing both.

This was probably the best video I've seen on your guys site (minus the 2 famous hedge funders of course, Kyle Bass & John Burbank). Guy I like as much as that guy Dave Flynn )I think) from Aspen Trading who does the technical analysis, both of whom I had never heard of before subscribing to your service. Great job guys; keep up the great work.

Great Interview..when he talks about momentum breaking highs and lows for the year, which particular bloomberg technical function is he using for the momentum indicator(s), is he referring to? is it the 1 year or 3 year high/low that matters more for a breakout/reversal

We hit 108 on the Euro...does a monthly close for the dollar index at 99.48 qualify as "anywhere in that vicinity" (of 99) so that we are now going to have a change in the FX markets (and every other correlated market)? I assume yes.

Just great. Definitely in my top 10 RVT presentations and I have watched 95% of them. I know his take is against the view of Raoul and a few other top quality macro folks but if he is right the gold "bugs" infesting this site will be really really pleased (I am cleaning my multiple legs as I type).
What I really like about some RVT presenters is when then provide hard stops or levels upon which their analysis is founded. Mike provided some great targets for gold, DXY, S&P, the Euro and the US$ which I have jotted down and highlighted together at my desk. For those of us that are not semi-professional or experience traders these levels provide an edge to act upon.

I am frustrated about the phrase used in the comments "the stock market". Mr Oliver said GDX should go up more than gold. GDX is a collection of stocks. Ergo the "stock market" is not going down. Some stocks will go up, some down. Now appears to be more a stock pickers market, a "value stocks" market and Mr Oliver seems to agree.

Very Informative, so thank you guys. I feel the same about the market. Obviously we are topped out. Things are so different now though. The dollar is so tight, believe it or not. Its needed everywhere and there isn't enough. I think the dollar goes up because of supply/demand dynamics. The stock market might go down, I hope it does, because it needs to deflate a bit. But like previously, there is no where else to go for safety in the world. The dollar could still go higher. Just thinking out loud. Still great interview and awesome shout out for Murray Rothbard!

Milty, can we add Michael Oliver's work to the RV Publications list? It would be great to see what an actual newsletter (or however he delivers his product) would look like! Many thanks, and great interview Michael (and Grant)!

Yes, I simplify what MSA does. Measure against a mean means measure again a given moving average. Long term down to short term, for the supposed "traders." In my prior comments I meant to say that at 2280 the S&P was 12% above its 3 yr. avg. What about its oscillating around its 3-qtr or 3-mo. avg. Each presents a different visual image of trend, sometimes in agreement sometimes not with a larger time scale of trend measure. We fit those pieces together, long-term, intermediate and short term. A puzzle with definable layers. Depending upon your participation horizon (trader for several days, weeks, months or quarters, you need to know what your time-frame of reference and concern says. We do that for institutional clients. Also have HNW clients, but fortunately or unfortunately demand for our unorthodox method has moved us up to mainly institutional client base. Best to you all. But what we do does require our degree of experienced interpretation and is not a black box. (And if you think about the notion of blackbox it means a method of timing that was humanly developed but then cut off from analysis. Would love that and we approach it, but without any desire to actually approach it fully. Human consciousness ultimately designs black box tools, hence by implication all black box tools are objects of "interpretation" despite their declaration of full objectivity. MSA seeks to be objective and cutting, but won;t claim black box. Besides its an invalid concept. - Michael Oliver

Rather than respond to all good questions, Mike Oliver would like to try to overarch answer many. Momentum Structural Analysis is fairly simple, though unorthodox. We measure price not against a money unit (dollar, euro, etc.) but against an average/mean of those price measurements. So, for example right now the S&P500 is at 2280 and that is 12% above that long term avg..mean. A single date point. Then collect month by month similar data points, but include the monthly range in relation to that man. And voila you have a single bar (month) that is a certain amount over or under that chosen mean. Run enough of those bars and you have something worth looking at. A momentum chart with structures, trends,etc. that can then be used to determine when a trend is positive/negative/transitioning. You can also do this on lesser time scales, like versus monthly momentum (3-mo. avg.) or weeky vs. 3-wk. avg.) etc. and will come up with various pictures, often crystal clear,of the momentum trend of a market. And you will learn over time that those trend measures are often more valid, earlier, anticipatory, than is the old orthodox exercise of involving price charts. Best to you all, hope you enjoyed the conversation.

Fabulous interview! Learned a great deal.
Curious to know if Mr. Oliver thinks that gold and silver will dip with the next correction down to 2200 (or lower). In Jan. '16, gold dropped with the market in the reaction to the Dec. '15 rate hike. Would he expect the same reaction again?

Yeah, so I have looked in and replicated the system with some major asset classes in different time frames. In general, there is not a whole lot of difference in price structure with momentum structure. Once in a blue moon, you will see divergences. So, perhaps when there is a true divergence, it may be a good trade signal. But, certainly as others have mentioned, at least in the presentation, he seems to be cherry picking only winners.

Hi Aymman. I had the same question in mind and started searching the net. In theory, the solution is very easy to implement with the help of excel spreadsheets. See the solution here at Sierra Chart https://www.sierrachart.com/SupportBoard.php?ThreadID=24271.
In practice, however, the task becomes more complex as you start playing with time frames and durations when searching for the meaningful duration for returning to the mean.
I suggest to contact your charting program providers and use their Indicator Builder for this. Some can help while others will ask you to build the indicator yourself.
My advice is to really put in the effort because once resolved, it is a valuable approach. I have my accounts with CityIndex in London, UK and although there is an Indicator Builder, I am no C+ or VB programmer so for me it is a question of finding someone to build it for me. Long way but I can walk, haha... Good luck and hope this helps.

At time stamp 15:20 there are two charts shown ,
one is a simple price v time chart from 1/30/2009 to 12/07/2016.
The other chart 2, is labeled "Momentum" and has time ( same period as chart 1) on the X axis , and a percentage scale on the Y axis and appears to show a fall off from around april 2014 in "Momentum " but it is not at all clear from the chart how this momentum value was arrived at . A clue is given by the name on the chart "annual momentum : monthly ranges vs 36 -mo avg. and in addition there are two dotted lines , one white and one red with no label . The reason I bring this up us that the 36 month moving average of the SPY is presently close to 2050 and I was trying to figure out why the level mentioned in the interview of 2211 is indicative of a breakdown ? . Can anyone enlighten me on how the momentum chart show at 15:20 is actually generated . Thank you .